European Stocks Rise as Maersk Rallies on Profit Forecast

Aug. 16 (Bloomberg) -- European stocks gained, after the
Stoxx Europe 600 Index dropped the most in more than five weeks
yesterday, as a gauge of mining companies climbed, outweighing
losses by airlines.

A.P. Moeller-Maersk A/S rallied the most in 4 1/2 years
after predicting that its Maersk Line subsidiary will post
better full-year profit than last year’s $461 million as it cuts
costs. An index of European mining stocks posted its sixth
consecutive weekly advance after precious metals jumped in late
trading yesterday. Deutsche Lufthansa AG lost 1.3 percent as
Morgan Stanley downgraded the stock.

The Stoxx 600 added 0.3 percent to 306.36 at the 4:30 p.m.
close in London, dragging the gauge to a 0.1 percent advance
this week. The equity benchmark slid 1.1 percent yesterday as
better-than-forecast U.S. jobless claims fueled speculation that
the Federal Reserve will soon taper its bond-buying program.

“It does feel like the U.S. economy is gaining a bit of
momentum,” said William Hobbs, the London-based head of equity
strategy at Barclays Plc’s wealth-management unit. “Investors
have been trying to decide whether good news is bad news. There
must be a lot of institutional money sitting on some very fat
profits year-to-date, and a lot of them may feel it is prudent
to trim those profits as tapering becomes a reality. What might
freak the markets out now is the pace of tapering.”

The Stoxx 600 rose to a 12-week high on Aug. 14 as a report
showed the euro area’s economy returned to growth in the three
months through June after six consecutive quarters of
contraction. The equity benchmark has rallied 11 percent since
reaching a low on June 24 as central banks signaled interest
rates will remain low for an extended period.

Housing Market

In the U.S., a Commerce Department report showed that
housing starts rose to an annualized rate of 896,000 in July.
Economists surveyed by Bloomberg had predicted a rate of
900,000. In a sign construction activity will increase, building
permits climbed to a 943,000 rate from 918,000 in June.

A separate release showed a gauge of consumer sentiment in
the world’s largest economy unexpectedly declined in August. The
preliminary reading of the Thomson Reuters/University of
Michigan index fell to 80 from 85.1 in July, missing the 85.2
median estimate of economists surveyed by Bloomberg.

Maersk Rallies

Maersk’s B-shares surged 9.7 percent to 49,080 kroner. The
group will probably post full-year net income of $3.5 billion,
excluding impairment losses and divestment gains, it said in a
statement today. That compares with the company’s previous
forecast of $2.9 billion.

Fresnillo Plc, which mines precious metals, added 4.2
percent to 1,172 pence and Randgold Resources Ltd. rallied 5.3
percent to 5,150 pence after gold surged to its highest price in
almost two months and silver jumped to a three-month high after
the close of European trading yesterday.

Opera Software ASA jumped 13 percent to 54 kroner, the
highest price since its initial public offering in 2004, after
predicting earnings before interest and taxes of $58 million to
$64 million for the full year. The Norwegian maker of Internet
browsers had forecast $52 million to $62 million. The company
still posted earnings per share for the second quarter that
missed analysts’ estimates.

Lufthansa, Ryanair

Lufthansa retreated 1.3 percent to 14.20 euros. Morgan
Stanley lowered its rating on the shares to equal weight from
overweight, meaning investors should not buy more of the stock.
The brokerage reduced its forecasts for the airline in 2013
because of weak markets in Asia and the Middle East.

Telekom Austria AG slid 2.7 percent to 5.57 euros after
Format reported that the company may sell 1 billion euros ($1.3
billion) of new equity. Shareholder America Movil SAB wants to
use the capital increase to fund investments, according to the
magazine, which didn’t say how it got the information. Telekom
Austria spokesman Peter Schiefer said the company does not need
to sell new shares.